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Catching-Up in Broadband Regressions: Does Local Loop Unbundling Policy Lead to Material Increases in OECD Broadband Uptake?

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  • Zhang, Wei
  • Boyle, Glenn
  • Howell, Bronwyn

Abstract

Local loop unbundling has been widely promulgated by policy-makers as a significant factor stimulating broadband uptake and therefore an essential component of a developing 'information economy'. Whilst empirical evidence is sparse and at best equivocal in respect of a consistent positive and statistically significant effect a recent study commissioned and published by the OECD does find evidence of such effects. When correcting for omitted variables correlated data and methodological inconsistencies our analysis using the models and data from this report instead support the contention that LLU's contribution to the level of national broadband uptake is materially very small and not statistically significant. Continued advocacy for the policy as a stimulant for broadband uptake on the basis of the OECD-published report is misguided.

Suggested Citation

  • Zhang, Wei & Boyle, Glenn & Howell, Bronwyn, 2008. "Catching-Up in Broadband Regressions: Does Local Loop Unbundling Policy Lead to Material Increases in OECD Broadband Uptake?," Working Paper Series 19092, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    • Handle: RePEc:vuw:vuwcsr:19092
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    File URL: https://ir.wgtn.ac.nz/handle/123456789/19092
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    References listed on IDEAS

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    1. Jerry A. Hausman & J. Gregory Sidak, 2005. "Did Mandatory Unbundling Achieve Its Purpose? Empirical Evidence from Five Countries," Journal of Competition Law and Economics, Oxford University Press, vol. 1(1), pages 173-245.
    2. Arellano, M, 1987. "Computing Robust Standard Errors for Within-Groups Estimators," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 49(4), pages 431-434, November.
    3. Howell, Bronwyn & Obren, Mark, 2002. "Broadband Diffusion: Lags from Vintage Capital, Learning by Doing, Information Barriers and Network Effects," Working Paper Series 3896, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    4. Distaso, Walter & Lupi, Paolo & Manenti, Fabio M., 2006. "Platform competition and broadband uptake: Theory and empirical evidence from the European union," Information Economics and Policy, Elsevier, vol. 18(1), pages 87-106, March.
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